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The question whether firms gain a sustainable advantage from being first to market has captured the attention of academic researchers and managers alike. A long list of theoretical arguments has emerged that indicate the existence of a sustainable consumer-based pioneering advantage. The veracity of such an advantage is supported by numerous empirical studies, which show a significant and enduring effect of entry timing on market share or sales. Yet, it is unclear whether a market share effect is sufficient to support the existence of a first-mover profit advantage. In fact, reviews of the entry timing literature have repeatedly pointed to the profit implications as one of the key unanswered questions in this area of research. This profitability question is not only of theoretical interest. There is at least anecdotal evidence that managers hold strong beliefs that 'being first' pays off and that they act upon those beliefs. Many recent Internet-related investment decisions have been justified with exactly this argument. The main objective of this paper is to empirically examine the effect of entry timing on profitability. More specifically, the authors examine profit differences between pioneers and followers that are strictly attributable to the entry timing decision, and control for differences due to other characteristic(e.g., resources). To do so, they need to control for unobserved differences between pioneers and followers that influence performance. Specifically, they test and control for the potential endogeneity of the entry timing decision. Since entry timing is itself a fixed effect, existing methods in the marketing literature to control for unobserved factors cannot be applied. Thus, they utilize the instrumental variable approach developed by Hausman and Taylor (1981), which allows them to control for unobserved fixed effects while providing a consistent estimate of the entry timing effect. Surprisingly, their results for a broad sample of consumer goods business units from the PIMS database indicate that pioneers have a long-term profit disadvantage relative to followers. In a more detailed analysis they replicate the typical demand-side pioneering advantage. Hence, in this respect their results are consistent with the existing literature. However, they find that pioneering leads to an even greater average cost disadvantage. They confirm the robustness of the profitability result by varying the profitability measure and the functional form of their empirical model and extending it to a sample of firms selling industrial goods. In addition to the profitability results they find that in all cases the assumption that entry timing is exogenous is rejected, thereby supporting the theoretical argument that this decision should be treated as endogenous. These results hold for the "average" pioneering firm. To gain further insights about the effect of the entry timing decision on firm profitability, the authors examine how the profit implications change over time. This analysis shows that pioneers obtain an initial profit advantage relative to later entrants that declines over time and turns into a disadvantage after about 10 years for firms in their sample of consumer businesses and about12 years for firms in their sample of industrial businesses. They then use these parameter estimates to approximate the lifetime profit stream accruing to pioneers relative to followers and calculate the "break-even" discount rate that sets the present value of the profit stream to zero. Though only an approximation, these results are compatible with a null effect of entry timing, per se, on lifetime profitability. The authors also explore three different factors - likelihood of consumer learning, market share position and patent protection - that they hypothesize should moderate the "average" entry timing result. This conditional analysis shows that pioneering leads to a sustained profit advantage in the consumer goods sample when (i) consumer learning is limited, (ii) the pioneering firm maintains a dominant market share position, and (iii) the pioneering firm continues to be protected by product patents. In the industrial goods sample, they find that pioneering leads to a sustained profit advantage when the pioneering firm continues to hold a process patent. Moreover, when customer learning is limited, the disadvantage disappears. They conclude that firms should not rely on entry timing, per se, as a source of a sustainable profit advantage. Rather, they need to articulate and evaluate why and how being "first to market" will lead to a sustainable advantage.